Sands China's Revenue Evaporates, Sees Monthly Operating Costs of $110 Million Amid Pandemic
June 01 2020 - 9:54AM
Dow Jones News
By Dave Sebastian
Sands China Ltd., a Las Vegas Sands Corp. subsidiary that
operates casinos in Macau, said its revenue evaporated almost
entirely in April amid the drought of mainland Chinese visitors
into the gaming enclave of Macau due to the Covid-19 pandemic.
The company posted revenue of $9 million in April, down 98.7%
from the year-ago period, on a loss of $180 million. It recorded
net income of $148 million in the same month last year.
The hit came as Macau's gross gaming revenue fell 96.8% and
visits from mainland China plunged 99.6% in April.
Daily adjusted loss of property earnings before interest, taxes,
depreciation and amortization was $3.5 million for the month,
totaling $105 million, compared with an aggregate property Ebitda
of $239 million in the prior year.
May results for revenue, operating loss, net loss and adjusted
property Ebitda weren't that different from those of April, Sands
China said. The subsidiary borrowed $404 million in April and May
from its revolving facility.
For the first three months of the year, Sands China posted
revenue of $808 million on a loss of $166 million. It posted
revenue of $2.33 billion on net income of $557 million in the
year-ago period.
The first quarter, according to the Macanese government,
reflected an 83.3% decrease in visits from mainland China into
Macau for the first seven days of the Lunar New Year, a usually
lucrative travel period that was disrupted during the early days of
the outbreak. For the period, visits from mainland China fell 14.9%
in January, 97.2% in February and 96.3% in March. Macau also said
monthly gross gaming revenue declined 11.3%, 87.8% and 79.7% for
January, February and March, respectively.
Amid the pandemic, Sands China said it estimates a monthly
run-rate of operating costs of about $110 million, development and
maintenance capital expenditures of about $65 million and interest
expense of about $25 million. The company isn't paying a dividend
for 2019 to cut costs.
The subsidiary as of May 29 had $2.41 billion in liquidity
comprising $801 million in cash and cash equivalents as well as
$1.61 billion in available borrowing capacity, it said. That is
enough to fund its operations for 12 months in this environment,
according to Sands China.
Sands China said the pandemic's effect on its results, cash
flows and financial condition will be material for the year.
"It is unknown when the COVID-19 Pandemic will end, when or how
quickly the current travel restrictions will be modified or cease
to be necessary and the resulting impact on the willingness of
SCL's customers to spend on travel and entertainment," it said.
Write to Dave Sebastian at dave.sebastian@wsj.com
(END) Dow Jones Newswires
June 01, 2020 09:39 ET (13:39 GMT)
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